Cargill filed the lawsuit against National Union Fire Insurance Company of Pittsburgh in U.S. District Court in Minnesota on November 24, 2021.
Cargill, based in Minnesota, discovered the fraud scheme in 2016, when it claimed to be covered by a crime policy through National Union Fire for up to $25 million.
According to court documents, two Cargill employees conspired with the founders of Women's Distribution Service, also known as WDS, to overcharge Cargill.
Michael Kennedy and Choung "Shawn" Nguyen worked for Cargill. Jennifer Maier and Brian Ewert founded the WDS.
In 2019, Nguyen, Maier, and Ewert pleaded guilty to wire fraud. Earlier this year, Kennedy was charged with wire fraud.
According to the indictment against Kennedy, money from the fraud was spent by Kennedy and his family on lavish vacations.
The total loss from the scheme, which began in 2009, was calculated by Cargill to be $44.7 million.
However, the insurance company has yet to pay Cargill, and the lawsuit alleges that National Union is in breach of contract. It is suing for the $25 million limit, which it claims is covered by the crime policy, as well as other monetary damages.
Ewert, Nguyen, and Maier were sentenced to 60, 41, and 24 months in prison, respectively, for defrauding Cargill in November 2019.
Kennedy faces up to 20 years in prison and a $250,000 fine if convicted of the charges.
Cargill declined to comment on the case in an email. National Union Fire could not be reached for comment right away.
Cargill employs 155,000 people in 70 countries across agriculture, food service, and pharmaceuticals, according to its website. The company's headquarters are in Wayzata, Minnesota.